Addiction Robert Peston Goes Shopping

For the last 60 years, British retailers have led

the world and changed the way we live.

From family-run empires

to pioneering supermarkets,

and from fashion boutiques

to the online revolution,

retail is something we've been good at.

In tonight's episode, we tell the story of the retail explosion

of the nineties and early 2000s, a period of breathtaking change.

In the old days, retailers bought things,

stuck them in the shops, and said, "Take it or leave it."

Today, it's...we put stuff in the shops

and if they don't want it, they don't buy it.

These were the boom years,

when big beasts stalked the high street, looking to make a killing.

I'm an educated risk-taker. You've got to be brave,

got to have a strong heart.

We flocked to buy a great variety of ever-cheaper goods...

Go back, go back, you can't get in.

..often made abroad.

But our love affair with shopping would get out of control as

we racked up big debts to pay for all that lovely stuff.

I was amazed at the easy level of obtaining high amounts of credit,

and in my heart I knew it just could not possibly last.

# A taste of a poisoned paradise I'm addicted you

# Don't you know that you're toxic? #

This was the period

when our retailers were at their most brilliant, world-beating best.

But it was also the era when our love affair with shopping

became a dangerous addiction.

Come with me back to the early 1990s.

The economy is in recession and Britain's shops are in trouble.

But there was one supermarket chain which would emerge from the

crisis as the biggest, most fearsome British retailer we've ever seen.

It lured us in with falling prices and a pioneering loyalty scheme

that would reward us while telling them what we wanted to buy.

Tesco would become a colossus, expanding relentlessly at home and abroad.

But it had all started here in a backstreet of East London's Hackney,

when a young Jack Cohen, around 100 years ago, put his barrow down

and started to flog army surplus fish paste and golden syrup.

Tesco was born.

Known as Slasher Jack or Governor to his staff,

Cohen was one of the legendary characters of British retail.

It may be hard to believe now it's become a cliche,

but his slogan really was, "pile it high and sell it cheap".

Oh, dear.

His barrow operation became Tesco - the 'Tes' came from his tea

supplier, TE Stockwell, and the 'co' from Cohen.

In the decades that followed, he turned his barrow into

one of Britain's biggest supermarket chains.

He looked like a sunburnt walnut, this wonderful craggy face,

a huge personality, very interested in everything,

a magnetic character.

This is Jack's signature, really, this lovely little tiepin.

And he gave it to very special people.

And he said, "Here's my tiepin, it's an old Yiddisher saying."

And they used to look at it

and they said, "YCDBSOYA. What does that mean then, Jack?"

And he had this wicked twinkle in his eye, and he'd say:

It means, "You can't do business sitting on your arse."

And they all sort of laughed, and that was Jack.

That was Jack's signature, I think.

MUSIC DROWNS SPEECH

Come on, somebody say yes, I'll charge you a pound.

Cohen's swashbuckling spirit shaped the way Tesco

developed in the post-war years.

And he never lost his market trader's instincts.

Salesmanship, showmanship, call it what you like.

And you've got to keep this going all the time.

Every week, there must be something special, something new,

something people want to come in and say, "Now what's special this week?"

And that's the excitement of business.

Since the early 1960s, Sir Jack Cohen had pinned

a great deal on Green Shield Stamps, an early loyalty scheme.

You were given them at the till, and had to stick them into books.

In our house, we had a whole sideboard full of them,

and my mum and dad exchanged them for toasters and kettles.

-News, news, news!

-Green Shield's come to town, oh, yeah!

# Green Shield's come to town Say Green Shield stamps

# Say Green Shield Stamps.

# You get wonderful gifts with Green Shield Stamps. #

Oh, yeah!

Towards the end of the scheme, well, it all got a bit crazy.

You could get a colour television for 700 books.

That's a lot of shopping and licking.

# Green Shield Stamps

# You get wonderful free gifts with Green Shield Stamps. #

But by the mid 1970s, both Cohen

and his beloved Green Shield Stamps were running out of steam.

Against his wishes, the Tesco board dumped the loyalty scheme.

As Slasher Jack's health faded, Ian MacLaurin took his ailing boss

for a day out in a brand-new superstore.

I stood by him and I looked down on this frail, old man,

holding him up, and tears were rolling down his face.

And he said, "You know, Ian,"

he said, "I never thought I'd see anything like this."

And I put him back in the Rolls-Royce

and he went back to Harley Street Clinic and he died that night.

Sir Jack Cohen was typical of the great entrepreneurs

who created Britain's giant retailers - buccaneering,

domineering, instinctive.

But at the time he died, Tesco was no longer

seen as a great threat to the market leader, Sainsbury's.

It was Sir Jack Cohen's successors

who'd propel Tesco right to the top.

In their more quiet and understated way,

they did something very simple - they listened to customers

and gave them what they wanted.

Tesco had been steadily making progress through the '80s.

But it wasn't until after the recession of the early 1990s,

that it really surged ahead.

The company's marketing boss, Terry Leahy,

understood what his customers wanted.

It turned out that customers were the most reliable guide.

They said, "Look, we've been in recession,

"we need you to offer us good value.

"And we need you to be more aware of the pressures we're facing today."

Tesco responded by going back to its low-price roots.

First it launched its Value range and then came the famous marketing slogan, "Every Little Helps".

Tesco was cutting prices to boost sales while,

in contrast, Sainsbury's was protecting its profits.

This was a return to the glory days of Slasher Jack.

Perhaps value was in Tesco's DNA.

Tesco always had a keen eye for price when dealing with suppliers.

'Because the one thing a price-cutting company needs is sheer size.

'The power to place orders large enough to force bargains with

'even the biggest manufacturers.'

If we can buy right, we can sell right, it's as easy as that.

And this price you're quoting me here is a bit too high.

You've got to come back and give us a better price

so that we can sell it at a good price.

Now it could offer even lower prices, because it was operating

on a bigger scale, enabling it to buy in bulk and sell cheap.

This was due to another canny move by Tesco - it bought vast

amounts of property during the recession of the early '90s,

acquiring sites for a new generation of out-of-town superstores.

We were able to accelerate it through in sort of '93, '94, '95.

And that gave us the opportunity to leave the others cold.

And I mean they... They didn't catch up then

and they haven't caught up to this day.

The other huge contributor to Tesco's rise came from Terry Leahy.

He'd been pondering how to revive Slasher Jack's retailing trick -

the loyalty scheme.

What his team came up with was Clubcard.

At Tesco, we think the world of our customers.

And we've been looking for a way to show our appreciation.

'Before Clubcard, we literally didn't know who was shopping in our stores.'

You might be spending the biggest part of your weekly income

in a Tesco store and we didn't even know it.

And we certainly didn't know if you left, we wouldn't know why you left.

So we wanted just to recognise you as a customer and say thank you.

As a Clubcard member, the more you shop at Tesco,

the more we give you back.

The Tesco thank you card, sorry, Tesco Clubcard.

Because every little helps.

Tesco's Clubcard can be seen as the natural successor to

Sir Jack Cohen's Green Shield Stamps.

But under Sir Terry Leahy, this was a loyalty scheme for the age of IT

and computerised market research.

Clubcard was to supercharge Tesco's rise to the top of British retail.

# Join our club. #

Ooh, it's still warm.

Clubcard was more than an old-fashioned loyalty scheme.

It gave Tesco a vast amount of data about its customers

and what they were buying.

What Tesco needed was someone to turn the raw numbers

into profitable information.

As the card was tested in 14 stores,

Tesco asked the advice of a self-confessed geek, Clive Humby.

'The data tells a very rich story.

'If you track a household over a year, you can do things like spot'

people going off to university

because the Pop Tarts and the pizzas disappear

and Mum and Dad start eating traditional fruit and veg again.

You can see a baby being born, in fact you can often see

a baby coming, before the baby is even born, because the

parents start preparing the house and buying the basics.

So you can actually see things in the way people are living their lives.

As the Clubcard trial came to an end in 1994,

the board had to decide whether to extend it to the whole country.

We did our pitch, and there was this huge, long silence,

and then eventually Sir Ian MacLaurin, as he was then,

turned round and said, "This really worries me,"

and I thought, "Oh, goodness. We've got it wrong," you know?

He said, "You know more about our business in three months than

"I do in all my years as a retailer. We've got to do this, guys."

I mean, it frightened us, initially, to be quite honest with you -

how good it was

and how we could actually, you know, change the way we ran our business.

The breakthrough was that Tesco could use the information to

reconnect with its customers in a more personal way,

offering them discounts and rewards based on their tastes

and needs, as the ads were keen to emphasise.

There's my letter and my vouchers and my Clubcard.

Thank you, Mrs Temple.

-I'm Dotty, actually.

-Yes. I understand

Tesco had found an ingenious way to encourage us to spend more and more.

Because points meant prizes.

I love a bargain and obviously they were promoting them in-store

and first of all I thought, "Well, I'll get them for the money off,"

and then I looked into it more and I thought, "Oh, actually, you can

"get loads of good deals." I started saving them up

each quarter and then I got holidays and days out

and meals out, trips across the Channel to France, just lots

of lovely things that we couldn't normally afford without Clubcards.

How fast did you see the success of Clubcard?

Almost straightaway.

In a slow-growth industry, one or two percent makes an enormous difference.

And the week after Clubcard was launched,

we outperformed the industry by 10% -

that's a profound change. I knew my life had changed, I knew that

the whole industry structure would never be the same again.

Had you ever seen sales growth like that in your entire career?

No. No, this was unprecedented and that for me is why

I think Clubcard was probably the most single, significant factor

in the success of Tesco.

Powered by Clubcard, Tesco overtook arch-rivals Sainsbury's,

and finally became Britain's number one supermarket.

And Terry Leahy accelerated its expansion abroad

into Eastern Europe and Asia.

Tesco's success abroad and unprecedented dominance

at home won them millions of new customers and plenty of enemies.

Lots of small businesses moaned, some of them legitimately,

that you put them out of business.

How did you feel about that?

I always felt Tesco was doing good work.

But it was done in competition

and in competition there are winners and losers and...

But it's not...

It's not just supermarkets who were losers though, was it?

I mean, I think that's the point that grates with many people.

Progress is very painful and it's messy.

And, erm, you know, the... The...

The many small benefits for millions of people often came

at the price, a big price, for individual businesses

that went out of business.

Whether you think Tesco's been good or bad for Britain,

it's arguably been pretty impressive in one significant way.

The history of British retailers expanding abroad has

typically been pretty sorry.

At Tesco, there are now more than 27 million people outside the UK

who hold its Clubcard.

Tesco has been a world beater.

By the mid-1990s, the economy was beginning to revive.

And after the years of recession,

spending started to flutter into life.

There was increasingly easy access to credit.

Deregulation and a booming economy spurred banks to lend.

Between 1993 and 1998, the amount borrowed on credit cards

almost doubled from £9.9 billion to just over £19 billion.

We were beginning to get into debt to feed our shopping habit.

But, as any addict knows, you can't have a six-day-a-week addiction.

In the mid-1990s, most shops still couldn't open on a Sunday.

But the law was a mess.

It didn't apply in Scotland, and in England and Wales,

well, you could buy cigarettes and porn on a Sunday,

but you couldn't buy a Bible because bookshops couldn't open.

The scene was set for an almighty scrap

between the retailing bosses

and the bishops for ownership of the Sabbath, for ownership of Sunday.

On one side, you had many of Britain's big superstores

and DIY chains lobbying frantically to be able to trade on a Sunday.

It was a big moment and a big battle.

It's remarkable in a way that this legislation,

which was from a different era, meant that, you know, the one day of

the week where ordinary families could go shopping,

the stores were closed.

ALL: Keep Sunday special!

-When do we want it?

-ALL: Now!

Ranged against them was a small band of irregulars,

the Keep Sunday Special campaign, led by Michael Schluter.

People from all walks of life, from all parts of the country,

for all kinds of reasons,

want to see the quality of life maintained in this country.

It did feel very much like a David and Goliath fight.

If you make Sunday into a shopping day, primarily, then where in the

week do people get the shared time off to spend together?

So, it was partly about those relationships

and partly about relationship with God for those who had faith.

-Sunday trading? No, thank you.

-No, thank you.

No, thank you.

You must be joking!

At stake was the special character of the British Sunday.

Would it remain a day of soporific telly, big lunches and walks,

or become just another shopping day?

In the run up to the vote in December 1993, it was neck and neck.

But at the last minute, one side edged ahead.

The ayes to the right, 286. The noes to the left, 304.

There were just 18 votes in it,

but Parliament voted for trading on a Sunday.

Order!

'On that night, I realised that we had made this huge

'step across the line,'

and there was no going back.

So as I walked out of the House of Commons, I felt really desolate.

I felt really, really gutted.

We'd known what it was like to have a day off that was different

and we decided to tear up that tradition.

Today, it's quite hard to remember a time when we didn't have

Sunday trading.

It's not a question you ask any more.

It's an essential part of the... of the business.

It's the heart of the business, Sunday trading.

It's only six hours, but it's a vital six hours.

It's what people want.

Sunday trading was to change the British way of life.

Today, Sunday is the second most important trading day

for most retailers.

The arrival of Sunday trading shows how our love of shopping was

sweeping away everything in its path.

Fuelling this growing materialism was the housing

boom of the late 1990s.

House prices shot up and people felt richer.

They were richer on paper, which encouraged them to go out and spend.

Much of that spending was on home improvement.

People equated the good life with a stylish house.

# Do you understand me now? #

-This is wonderful!

-You like it, do you?

-It's fantastic!

-Do you like it?

-Smashing! Yes, it's lovely.

DIY and self-assembly became the new craze. And one store would

emerge as the undisputed leader of the flat-pack.

In 1987, a vast new warehouse of a store was opened

here in Warrington, which would turn the humble Allen key

into the only bit of kit you need if you want to lead a stylish life.

Now, in the process, Warrington,

which many people think of as a great home of rugby league,

was turned into a magnet for expat Swedes

and also for design-conscious and cost-conscious Brits.

This was the first British location of IKEA.

IKEA began life in Sweden in 1943.

When it wanted to expand in Britain, it inevitably looked at London.

But a wily local development agency wooed it to Warrington.

For the locals,

the arrival of minimalist Swedish design was an exciting adventure.

I don't think Warrington's ever seen excitement like an IKEA opening!

I think King George visited in about 1890 or something,

and they closed Warrington town centre off.

This was like 100 times bigger than that!

They queued from the early hours for a first

glimpse into the Aladdin's cave alongside the M62.

Welcome to the first IKEA store in England.

It was really, really manic. We had coach

trips from Northern Ireland and Southern Ireland, people who'd

come over on the ferry, people who'd come from the tips of Scotland,

people who had waited, like ourselves,

for the first IKEA UK to open.

'But probably the biggest surprise IKEA had for British customers was

'the price tag.'

How important is price to IKEA?

I think it's the heartbeat, the DNA of our business.

It starts with the price.

IKEA's big Swedish idea was to make designer furniture

and furnishings affordable, attainable.

IKEA was able to keep prices down

thanks to what's known as a global supply chain.

That's mass production overseas, transporting in bulk

and then selling everything in vast hangars, like this one.

And there was another way in which IKEA kept costs down.

It expected you and me to make most of the furniture,

whether we liked it or, as in my case, not.

I really like shopping at IKEA.

I like just walking around.

I love the marketplace bit

with all the little nick-nacky bits to buy.

Umm...

And also, we've bought quite a lot of furniture and things from there

because it is cheap compared to other places.

And you can walk round and choose what you want and then take

it home with you in the car, really, and get your husband to build it.

The formula went down a treat,

though a few things were lost in translation.

There was a lot of Swedish names that sort of had, umm, a little

bit of another meaning in the English language.

We had, umm, the Bra table top. We also had a hammock called Slappa,

which ended in an A. And we also had a Bolax coffee table which

caused a lot of confusion to people and got a few chuckles,

especially when the warehouse rang up and said, "We have another

"load of Bolax for you!" That, err, didn't last in the range very long!

And gradually, this part of the northwest

became... well, a bit Nordic.

Ett, tva, tre, fyra, fem, sex, sju,

atta, nio, tjugofyra, tjugofem, tjugosex...

Don't know any more!

HE LAUGHS

And it wasn't just Warrington because IKEA reacted to

and led significant cultural change in Britain.

# Don't worry, be happy... #

We were going through, er, a real fundamental

change in the society in the UK at the time. I think people were really

looking for a different way to, umm, decorate and furnish their homes.

It was the year, also, if you remember, of Changing Rooms.

And then suddenly, IKEA was there with this very...

what has become an iconic TV ad for us - 'Chuck out the Chintz!'

# Chuck out that Chintz

# Come on, do it today

# Prise off that pelmet and throw it away... #

The ad tapped into the way our national tastes were evolving.

With IKEA's help, we could be less like our parents

and embrace Scandinavian style.

-Chuck out that Chintz!

-Yes, chuck out that Chintz!

# Yes, chuck out that Chintz today! #

IKEA, in a way, captured and led a new national mood.

As Tony Blair's New Labour swept to power in a landslide in 1997,

the idea was that we were all middle-class,

the nation had become middle-class.

-Hiya.

-Hi.

IKEA, and retailers like IKEA, were promising the good life for all.

In the '90s, it wasn't only a new generation of retailers

like IKEA that were selling cheap goods, made abroad.

We'd long imported what we wanted.

But with globalisation, this trend accelerated,

and British stores turned in ever larger numbers to foreign producers,

which could make stuff at much lower cost than British manufacturers.

For manufacturing in Britain, it was bad news that retailers

were finding it easier to buy cheaply from Eastern Europe,

from North Africa, from Asia, from all over the world.

And perhaps the greatest casualty was one of those pillars

of Britain's former industrial might - clothing and textiles.

Marks & Spencer,

the departmental store with the famous St Michael label...

For years, Marks & Spencer had boasted of

its support for British manufacturing.

Remember that over 99% of St Michael goods are British-made, and there'll

be a wider variety in your Marks & Spencer store.

95% of our sales were British-made goods

throughout the '60s, '70s, '80s.

It became obvious that in quite large areas of the business...

..we were not competitive.

-Is that price or quality or...

-Price.

Now, the reason M&S was no longer competitive was that many

rivals, without its loyalty to British manufacturers,

were simply going for the cheapest foreign-made goods.

I've always had a great respect for Marks & Spencer.

They did then, and still do, some things extremely well

at very high standards in the business.

I think they never appreciated the full

significance of global trade and global sourcing.

Marks & Spencer made profits of more than £1 billion

for a couple of years running in the late '90s,

the first British retailer to do so.

But profits then plunged and the company, to cut costs, abandoned

its historic and vital support for Britain's textile industry.

M&S pulled the plug on British suppliers.

And the percentage of its clothes made in Britain

went from 90% in the 1980s to 55% at the end of the '90s

to next to nothing after the millennium.

# Not the promises of what tomorrow brings... #

M&S tried to keep the UK textile industry going on,

but at the end of the day, it was uneconomic.

We had to go. We had to go. And in truth, we went too late.

We were the last man leaving.

# Nothing ever lasts forever

# Nothing ever lasts forever... #

Marks & Spencer's move was the culmination of a huge shift

away from British manufacturing,

which laid waste for the country's clothing and textiles industry.

People crying, shocked.

What else is there? It's all finished.

Textiles, it's all finished.

As a nation, we got much cheaper clothing,

but we struggled to develop new exporting

and manufacturing businesses to replace those that were destroyed.

Now, here's one set of numbers that shows

the scale of our industrial decline.

In 1978, more than 750,000 people were

employed in textiles and clothing.

That had slumped, 30 years later, to less than 90,000.

It was to the Far East that many British store groups were

looking for low-cost makers.

Hong Kong has been a source of cheap clothes since the 1970s.

One retailer has perhaps understood this more than most.

Sir Philip Green is in town to open his first Topshop in China.

And soon, he'll move to the mainland, Shanghai and Beijing.

It's a new front for him in his project to export a famous British

brand around the world.

We're back in business now. That's the fun bit!

It's a big new stage for the showman of Britain's high street,

an entrepreneur with an acute understanding

of how retailing has gone global.

There's only one Philip Green born every 50, 100 years.

You know, he is very colourful, but he is very able,

he's very quick, he's very charismatic,

he's financially, you know, very, very savvy and, you know, he is fun.

Come on, Mary! Got to do something for a bit of fun.

I might not... might not get out of it!

-That's good.

-Where is it?

Wanted to tie you up for years!

Can't believe you're making me do this!

Now that will ruin my hair!

You see?

# Golden years

# Gold, whop, whop, whop... #

Hong Kong, 40 years earlier, was where he made a discovery that

would shape his career.

A trip as a young man opened

his eyes to the possibility of producing clothes in the Far East.

# Nights are warm and the days are young... #

I visited Hong Kong the first time in 1974.

It was the centre of the world in terms of supply chain.

Everybody was in a hurry. You know, there was action.

-It felt exciting?

-Yeah. Oh! I mean...

The things you could get done there, you know, at speed.

You sort of arrive, you're left with all the samples in your bag.

It was exciting. You know, just had momentum.

You know, they're doers, just got things done.

No matter how complicated, you get it done.

# Golden years... #

Philip Green is one of the towering figures of British retailing -

driven, relentless, domineering, often controversial.

His career started here, in the back streets north of Oxford Street,

which used to be the centre of London's rag trade.

It's here where he learned how to wheel and deal,

how to spot a bargain and avoid a turkey -

skills which would eventually deliver him ownership of a huge

chunk of Britain's high street and turn him into a multi-billionaire.

# I'm in with the in crowd

# I go where the in crowd goes... #

In 1979, he acquired his first shop in the heart

of London's West End. It sold discounted designer clothing.

Green was in his element. But not all his ventures worked.

What about the idea of the cake?

Would be nice to have a cake in the shape of a jean.

Joan Collins jeans never quite became the high street brand

he'd hoped.

And the old City of London was a bit stand-offish.

But through the '80s and '90s, he did deal after deal,

specialising in acquiring near bust businesses, fixing them

and selling them on for a profit.

He was very much the unknown quantity,

appeared to be brash, er, appeared to be very self-confident,

and was so different from the established effete retailer that

tended to tread the hallowed halls of Marks & Spencer and John Lewis.

And maybe some people found that quite difficult.

You know, what did this mean to the establishment?

Green had an advantage over the old establishment -

he not only understood how to run a business better than

most of them, he also had a much better grasp of finance.

# Harder, better, faster, stronger... #

In 2000, he bought the ailing British Home Stores

for £200 million, mostly with borrowed money,

and within four years, he'd pocketed £400 million in dividends.

Two years later, he bought Arcadia,

the retail giant that owned Topshop and Dorothy Perkins,

among other brands.

# Harder, better, faster, stronger... #

Most of the great 20th century store groups were built up over

decades by tyrannical obsessives such as Simon Marks

at Marks & Spencer and Sir Jack Cohen at Tesco.

Sir Philip Green, with his ruthless attention to detail, has

much in common with them, but there is a really important difference.

His vast 21st century retailing empire,

which includes BHS, Burton and this place, Topshop,

was bought over just a couple of years at the turn of the

century with hundreds of millions of pounds, largely borrowed from banks.

Green is a symbol of this high-borrowing era.

He bought Arcadia for £850 million,

putting in just £9 million of his own money

and borrowing almost all the rest.

It's a remarkable thing, the way you won

the confidence of bankers in the City, in that sense.

How did you do that?

Repaying them. On the due date. I mean, I think, being reliable.

Nine o'clock's nine o'clock.

You know, I say I'm going to do something, I do it.

You shake hands with me, you don't need a piece of paper. It's done.

He's definitely got the X factor, you know.

He's definitely got the magic dust.

I've seen him do things which hadn't been thought of by the bank,

and yet, you're paying a bank to help you get the deal done.

So, you know, he's as good as any banker.

Green's brass neck and ambition made him the most powerful man

on the high street and it gained him a huge mountain of cash.

But it wasn't enough.

He had his eye on another great British high street institution.

I remember walking round M&S.

It was probably October '03. It sort of looked pretty miserable.

I just said - virtually joking - I said, "Do you know what?"

I said, "I'd love to put M&S out of their misery."

One of Britain's biggest retail brands, Marks & Spencer,

now finds itself being targeted by

one of Britain's most successful retailers.

Philip Green, the billionaire...

Green called Stuart Rose with an offer.

# A little less conversation A little more action, please... #

Philip had called me up and said, "Come and see me, son.

"I'm going to bid for Marks & Spencer and I've got a job for you."

Rose turned him down. He was then made a more tempting offer

by Green's enemy, the board of Marks & Spencer.

It saw Stuart Rose as their white knight.

And by Saturday night, I was chief executive.

And Philip was unamused?

Philip was pretty unamused, yes, to say the least!

Philip Green felt Rose had betrayed him by taking the M&S job.

Uneasy friends, long-standing rivals,

they went head-to-head in the corporate battle of the age.

Did you think you were going to win?

I never thought I was going to lose.

I worried about it but in...

But I always believed that we would prevail.

'It was so close, so tight, so closely fought, that if I'd

'ever allowed myself to think, I'm going to lose this,

'I'd have lost it.'

'I remember we were sitting, actually, here in one

'of the boardrooms and it was about eight, 9 o'clock at night. I said,'

"We're either going to open this thing tonight

"or I'm going to the beach."

Green went to the beach.

For a man used to winning, losing was a bit of a blow.

Instead, he poured his energies into Topshop.

It had long been a successful British brand,

but under Green it would become a leader,

an icon of young fashion.

He would run Topshop with an attention to detail

which marks out many of Britain's retail success stories.

I think we should have two or three more mannequins this side.

I think it's a bit... Don't you think so?

-We can get more in.

-You said it yourself.

-Yeah.

And he would add a final ingredient - stardust.

Much of retail is show,

and Sir Philip Green has always been something of a showman

who understands the awesome power of celebrity.

From the launch of his very first West End store in 1979,

he's always seen the shop window as a stage.

And in 2007 he put on probably his most celebrated production,

starring Kate Moss.

# I know a girl with the golden touch... #

Moss, who helped design a range of clothes for Green,

caused a sensation when she appeared in the window

of Topshop's flagship store in Oxford Street.

The fans and paparazzi lapped it up.

# You can have it all if it matters so much... #

Kate Moss is a one-off.

She's an iconic figure, she's got a certain rock chic style.

It was by pure luck that we got together, it wasn't a plan.

It was just one of those instinctive moments.

I said I want to build a stage in the window.

Kate said to me, "Are you sure?" I said, "Please trust me."

And you know, there were pictures that went round the globe.

Today, Sir Philip Green is an unusual combination of noisy outsider and establishment.

This is the Fashion Retail Academy,

an institution he's founded and helped to bankroll,

which gives young people, some of them like him,

without many formal qualifications, training in the retail game.

And today it's their graduation ceremony.

It's an occasion which reflects the man himself -

glitzy, and not short of pithy and blunt advice on how to get on.

I come here to speak from time to time and say

if you don't love what you do when you wake up in the morning, don't do it.

Green sees the academy as an example of how his accumulation

of vast wealth allows him to give something back to Britain.

But others question whether he's given back enough in tax.

In 2005, Arcadia paid a stunning £1.2 billion dividend

to its legal owner -

not in fact Phillip Green, but his wife Tina.

She's resident in the tax haven of Monaco,

which means she wasn't liable for £300 million of British tax.

You grew up in this country and it, to an extent, made you who you are.

There are some who say you don't give enough back through tax.

What do you say to those people?

I don't think there's anything to say.

As far as I'm concerned, we're a UK-based company. We've paid all...

You go and look at our accounts, right?

We've paid all our corporation tax that's due from the time

we bought any of the businesses.

We've not had any wonky, clever UK tax planning.

We've been UK taxpayers.

We've got a £500 million payroll

and it hasn't been done by firing lots of people.

It hasn't been done by sort of throwing people in the road.

The acid test is, everybody's here.

Everybody's working away.

We've been successful. I can't apologise for that.

In the years after the millennium,

Green was one of many fashion retailers who had to respond to the increasing power of celebrity.

The proliferation of celebrity magazines meant shoppers

could see what stars were wearing and demand the same look.

For most fashion businesses, the increase in the power of celebrities

over the nineties and the noughties has been seismic,

absolutely seismic.

So our retailers had to collaborate with the trend-setters

and move super fast to get the latest look on the racks and shelves.

Speed, from design to the shop, became the be-all and end-all.

Successful retailers could no longer get away

with just a single collection per season.

They had to respond immediately to what celebrities were wearing

or the latest catwalk show.

So-called fast fashion had arrived.

If David Beckham did turn up at a party in Los Angeles tonight

with a white tie on, you can bet

that somebody will turn up in a shop tomorrow saying, "Have you got any white ties?"

That's fast fashion.

What's the fastest you can spot a trend and get the clothes on the shelves?

-Three weeks.

-Three weeks.

When you started in the business, what would be the typical lead time for a typical British retailer?

Oh, it would be months.

People were thinking about winter and summer.

Now we're thinking about Monday and Friday.

MUSIC: "Hey Ya" by Outkast

Fast fashion, fuelled by our celebrity-obsessed culture,

has reinvented the retailing of clothes over the past 20 years.

It's powered the growth of stores like H&M, River Island and New Look.

But there was one store

which would do fashion faster and cheaper than anyone else.

Primark.

# Hey ya! #

It arrived in Britain from Ireland in 1973.

But it wasn't until just after the millennium that it began to grow

into the colossus that it is today.

First it bought former C&A stores,

then snapped up 41 Littlewoods sites,

giving it a presence on most big British high streets.

And when it arrived,

what we all noticed was how unbelievably cheap it was.

I go into Primark, basically, for the price.

Buy a pair of flip flops in Primark for four pound,

go to Marks and Spencer and pay £15.

So it comes down to price, really.

Since Primark has come into the spotlight a little bit more,

a lot more people are starting to take an interest in fashion

because they can actually afford to.

And I think that's great because it's opened up to so many more people that would want to,

but couldn't necessarily afford to before.

Primark was at the forefront

of fashion prices becoming cheaper and cheaper.

According to official statistics, clothing prices in the UK in 2004

were 15% below where they had been 15 years earlier.

Now, this trend towards cheaper and cheaper clothing

created an extraordinary new phenomenon.

Clothes were bought, worn once, maybe twice, and then thrown away.

It's almost disposable clothes, you can buy something from Primark

for £5, wear it twice and then you don't feel guilty about throwing it

away because it's the same as buying fish and chips, isn't it, really?

The driving force behind clothes sometimes cheaper than chips

was Arthur Ryan, a legend in the industry

and notoriously shy of publicity.

This Primark corporate video

is almost our only glimpse of the man himself and his business philosophy.

What we're trying to do all the time is to keep the business focused on where we are.

People said we should grade up and start selling £200 coats.

It's just a death trap.

They're not going to go and spend £59

because another £59 gets them to Lanzarote for two weeks.

Arthur's a very, very, very old friend.

This man has definitely travelled more miles across more stores

than anybody ever in the retail business.

He was out on the road every week, walking stores,

travelling stores, doing local mark downs.

I mean, if you want to talk about somebody that loved, loved,

loved the business, he would be my champion.

This is Charlotte's first range.

You know the rule - if it doesn't work, you won't have a second range.

Ryan's combination of chic and cheap has won Primark

a devoted following among women shoppers of all ages.

And in 2007, that tipped over into Primark-mania.

-Go back! Go back!

-SCREAMING

Oh, my God!

Primark had become so popular

that when it opened its first flagship store here on London's Oxford Street, there was mayhem.

People fought to get inside, the police were called,

a couple of women ended up in hospital.

London's evening paper described it as,

"the Battle of Primark".

Now our obsession with buying as much as we can

as cheaply as we can had driven us, well, slightly bonkers.

And our need for everything to be cheap, cheap, cheap

may have heaped a huge, tragic cost on others.

In April this year, a Bangladesh factory used by companies

supplying a number of big retailers, including Primark, collapsed,

killing more than 1,000 people.

We've seen a vivid example of what's happened in Bangladesh, where people tragically died.

How do you think that happens?

It's from price pressure because there's a relentless demand

from people saying,

"Give me this on a cheaper possible price."

Somebody cuts corners. And that is very tragic.

And, you know, we as consumers are largely,

largely insulated from that.

We move on but these are other people's lives,

these are other people's, you know, livelihoods

and we now in a relatively rich society need to understand that.

When something happens in the news like the Bangladesh scenario recently,

it does sort of bring it to the forefront of your mind.

But I think, to be honest,

when you're getting up and going shopping

it's not the first thing you think of.

You just think, "Oh, I like that top", you don't go,

"Oh, I wonder who made it and I wonder what the conditions they were working in."

It's not something that comes to the forefront of your mind.

Some now ask if the race to the bottom has gone too far.

I think we've got to the point now where you just cannot push pricing any cheaper.

Where are we going to go and manufacture stuff?

We've seen manufacturing go from the UK. It went to the Far East.

It moved into Cambodia. It moved into India.

It moved into Bangladesh. It moved into Sri Lanka.

It's moving now into Africa. It's moving now into South America.

I mean, eventually we're going to have to go to Mars.

But in the early years of this century,

we were far too busy buying to worry too much.

Britain was enjoying what seemed like a never-ending boom.

When life was booming, people were looking for more for less

because they had more information, more ability to choose at will

from lots of different sources.

Supermarkets offering a huge variety of choice

so the world was their oyster.

There was unbroken growth for 16 years

- genuinely, we'd never had it so good and we borrowed and borrowed to buy and buy.

We do shop too much but what can you do? We love it.

That's what credit cards are for. The buy now, pay later syndrome.

We went through this period of spend, spend, spend

and then it's stuff you don't want.

You know, and women were the worst at it, you know the cupboard,

everything falls out and the pairs of, you know,

seven pairs of shoes they'd never worn!

Some of our city centres became glitzy temples to consumerism

and for perhaps the best symbol of the boom years,

you had to look somewhere slightly unexpected.

ADVERT: The Bull Ring shopping centre is symbolic of the new Birmingham.

There's nowhere quite like it anywhere else in the world.

When the old Bull Ring shopping centre was opened in the 1960s,

it was the last word in modern.

There's no more exciting place anywhere for window shopping

or just browsing around.

But by the 1980s it was fast losing its lustre,

as these ads rather hinted.

In the early years of the millennium,

the ageing and increasingly dowdy Bull Ring was transformed by this,

the new Selfridges,

a cartoonist's space-age vision of a modern department store.

And in a way, it captured the spirit of the boom years.

Big, bold, confident, and perhaps a bit excessive.

Shops like Selfridges had once been exclusive to London's West End.

But this store and the opening of Harvey Nicks in Leeds

a few years earlier seemed to promise that life's luxuries

were tantalisingly within reach of all of us.

Yet the boom had been built on dangerous foundations.

This was an age when the price of much of what we wanted to buy

became cheaper and cheaper, and with inflation seemingly a thing of the past,

the Bank of England kept interest rates relatively low,

which encouraged us to do more and more of our shopping on credit.

Now, as the retailing boom became something of a frenzy,

just what we borrowed on credit cards

between 2003 and 2005 soared an eye-popping 30%.

Household debts ballooned

well above those of our old competitors the Germans,

and more than in any of the big, rich nations,

including shopping-mad America.

By 2006, the debts of British people had become greater

than the value of everything the country produces each year.

We were living and spending well beyond our means.

Rachel Gilhen was a self-confessed shopaholic

who borrowed to feed her habit.

I love shopping a lot.

I used to enjoy going to the shops. I used to go to the shops every day.

Didn't always used to be clothes, used to be shoes, handbags, make-up.

It was very easy at the time to get credit. Very easy.

There was one occasion where I had an appointment with the bank

in my lunch hour to see about a bank loan.

And by the time I'd left the back, the money was already in my account.

Her debts soon mounted up.

I was only making minimum payments

which obviously only probably scrapes the interest.

I was getting calls from banks, I was getting letters from the banks,

asking for payments which I couldn't make.

And that's when I realised I was in trouble with money.

With debts of £14,000 and no way to repay them,

Rachel felt compelled to declare herself bankrupt.

She wasn't the only person borrowing more than they could afford.

I was amazed at the easy level of obtaining high amounts of credit.

You could see customers coming in the shop,

walking out with a thousand pounds' worth of equipment, no deposit,

no interest for 12 months.

It really was a matter of some concern,

and in my heart I knew it just couldn't possibly last.

The great shopping boom didn't last.

We'd binged, buying more and more for less and less.

On the eve of the great crash,

consumers, shoppers, were beginning to struggle under the burden of record debts.

As for retailers, their need to buy as cheaply as possible from abroad

almost killed British manufacturing.

The massive spree had gone on far too long

and about to land on our doormats was the mother of all bills.

Next time:

How a banking crash and the unstoppable rise of online shopping

whipped up the perfect storm on Britain's high streets.

Subtitles by Red Bee Media Ltd